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CONVERTIBLE NOTES PAYABLE

9 Months Ended

Mar. 31, 2022

NOTE 5 – CONVERTIBLE NOTES PAYABLE

On January 2, 2020, the Company executed a 10% convertible promissory note in which it agreed to borrow up to $300,000. The note is convertible at a price per share equal to the lower of (a) the Fixed Conversion Price (which is fixed at a price equal to $0.30); or (b) 80% of the lowest trading price of the Company’s common stock during the 5 consecutive trading days prior to the date on which lender elects to convert all or part of the Note. The initial deposit of $125,000 was made on January 15, 2020 and included a $25,000 OID. As required by ASC 470-20-30-6 the Company recognized and measured the embedded beneficial conversion feature at the commitment date of $200,000 which was credited to paid in capital, a $150,000 debt discount and a $75,000 loss on the issuance of convertible debt. As of December 31, 2021, all of the debt discount has been amortized to interest expense. During the nine months ended March 31, 2022, $134,476 of the note was converted into 4,249,961 shares of common stock per the terms of the agreement. As of March 31, 2022 and June 30, 2021, there is $15,524 and $150,000 and $56,677 and $40,250 of principal and interest, due on this loan, respectively.

During the nine months ended March 31, 2022, the Company issued the following new convertible promissory notes.


Note Holder	Date	Maturity Date	Interest Rate	Balance March 31, 2022
Power Up Lending Group Ltd ⁽¹⁾	10/1/2021	10/1/2022	10%	$	55,000
Fast Capital LLC ⁽²⁾	10/26/2021	10/26/2022	10%	$	65,000
Sixth Street Lending LLC ⁽³⁾	11/17/2021	11/17/2022	10%	$	55,000
Coventry Enterprises, LLC ⁽⁴⁾	1/5/2022	1/5/2023	10%	$	180,000
ONE44 Capital LLC ⁽⁵⁾	1/13/2022	1/13/2023	10%	$	160,000
Mast Hill Fund, L.P. ⁽⁶⁾	1/20/2022	1/20/2023	12%	$	350,000
Sixth Street Lending LLC ⁽⁷⁾	2/1/2022	2/1/2023	10%	$	80,000
ONE44 Capital LLC ⁽⁵⁾	3/22/2022	3/22/2023	10%	$	120,000
			Total	$	1,065,000
January 2, 2020, Note				$	15,524
		Less debt discount		$	(471,572)
				$	608,952

Conversion Terms

(1)

61% of the average of the three lowest trading price for 15 days prior to conversion date.

(2)

61% of the lowest trading price for 15 days, including conversion date.

(3)

61% of the lowest trading price for 15 days prior to conversion date.

(4)

Convertible only upon an event of default. 90% of the lowest trading price for 10 days prior to conversion date.

(5)

60% of the lowest trading price for 20 days, including conversion date.

(6)

Convertible only upon an event of default. Conversion would then be $0.10.

(7)

61% of the lowest trading price for 15 days prior to conversion date.

Total accrued interest on the above convertible notes as of March 31, 2022, is $72,468.

A summary of the activity of the derivative liability for the notes above is as follows:

Schedule of derivative liability
Balance at June 30, 2021		—
Increase to derivative due to new issuances		1,475,335
Decrease to derivative due to conversion		—
Derivative loss due to mark to market adjustment		(516,136)
Balance at March 31, 2022	$	959,199

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy as of March 31, 2022, is as follows:

Schedule of fair value hierarchy
Inputs	March 31, 2022			Initial Valuation
Stock price	$	0.035		$	0.035 – 0.24
Conversion price	$	0.015 - 0.02		$	0.015 - 0.082
Volatility (annual)		217.25% – 45.16	%		314.76% – 735.86	%
Risk-free rate		1.06% - 1.63	%		0.09% - 1.59
Dividend rate		—			—
Years to maturity		.5 – .98			1